Saudi Arabia extends the tax amnesty scheme until 31 December 2024

Introduction

In March 2020, the Zakat, Tax and Customs Authority (ZATCA) released a tax amnesty program in the context of the COVID-19 pandemic, with the aim of mitigating its impact on taxpayers.

This tax amnesty scheme exempted taxpayers complying with certain requirements from fines and penalties arising from late registrations, late payments and late filing of tax returns in relation to certain taxes.

Since the tax amnesty program was initially released, it has been extended over time, with the latest extension being granted up to 30 June 2024. For further details on the previous extension, please refer to our previous publication on the following link.

The Ministry of Finance of the Kingdom of Saudi Arabia (KSA) has now communicated (through Resolution No. 1352 28/11/1445AH released with date 30 June 2024) yet another extension of the tax amnesty scheme, for an additional window of six (6) months. This entails that the tax amnesty scheme is now available for taxpayers until 31 December 2024.

Scope and applicability

The tax amnesty scheme provides for an exemption of unpaid fines and penalties, derived, amongst other, from the following circumstances:

• late registration for tax purposes;
• delayed payment of tax liabilities;
• delayed tax return filings;
• value Added Tax (VAT) return correction; and
• violations of VAT field detection and e-invoicing based on article 45 of the VAT Law.

In any case, the tax amnesty scheme shall not be applicable to fines resulting from tax evasion violations and fines paid before 1 June 2022.

The taxes covered under the tax amnesty program include Corporate Income Tax (CIT), VAT, Withholding Tax (WHT), Excise Tax and Real Estate Transfer Tax (RETT).

The eligibility to apply the exemption on fines in the framework of the tax amnesty scheme is subject to taxpayers complying with certain requirements, as per the below detail:

• registering with ZATCA for the relevant taxes;
• submitting all outstanding tax returns; and
• paying the corresponding tax liability or opting for an instalment plan.

Conclusion

The extension of the tax amnesty scheme provides taxpayers within KSA with yet another opportunity to rectify their tax position without facing any additional penalties.

Businesses operating within KSA are encouraged to analyse their existing tax position and take the necessary steps to regularize their situations before 31 December 2024, to avail the tax amnesty scheme.